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What is Money & where does it come from?

Introduction on Money and Banking:

Money which is anything that is generally accepted as a payment and it is more efficient and accepted in our days than “bartering”, which is trading and exchanging goods without involving money in the old days. Because in the old days people used to trade their belongings between each other for living, for example, you want the goods or the services that the other person has to offer, and this person wants the goods or services that you have to offer, which is also referred to as double coincidence of wants.

Banks in the old days was referred to as vaults, where people save their belongings and valuables. However, gradually it became what is so called banks, which is a financial institution used as a monetary system to control the cash flow between individuals and organisations. Banks reduced our needs to carry lots of cash around and increased our level of safety and the security of our money, for example, when we want to purchase some items cheap or expensive we can issue a cheque or use our credit cards to transfer the payments and here where the banks comes in our service. Also banks made it easier for us to use and carry certain amount of cash by setting an ATM machines in every corner of our city without the hustle and wasting time going to banks.
Overall, banks supplies money more than what it would and make the loans, as well as making the payment system efficient, therefore, we can see that banks are financial institutions that accept deposits and makes loans.


Definition of Money:
According to Stephen G. Cecchetti, money is generally the assets that are accepted as a payment for the use of the goods and services or the repayment of debts. Therefore, we understand that money is anything that has a value and used as a means of payment, and there are three characteristics (functions) for money,...